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adidas expects currency-neutral revenues to decline at a low single-digit rate in 2023, up from previous forecasts of a decline at a mid single-digit rate.

The company now anticipates underlying operating profit – excluding any one-offs related to Yeezy and the ongoing strategic review – to reach an estimated €100m ($105m) in FY 2023, after previously predicting it would break-even.

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Meanwhile, the Adidas’ operating loss is expected to total around €100m in FY2023, down from previous estimates of €450m.

Adidas says this includes the positive impact of two Yeezy drops in Q2 and Q3, the potential write-off of the remaining Yeezy inventory, now estimated to be around €300m (previously expected to be €400m) and one-off costs related to the strategic review of up to €200m, which remain unchanged.

Based on the preliminary result announcement for Q3 2023, currency-neutral revenues increased 1% compared to the same period in the previous year. However, in euro terms, the company’s revenues declined 6% from €6.41bn ($6.77bn) in 2022 to €5.99bn ($6.34bn) in 2023.

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Operating profit fell to €409m during Q3 2023, down from €564m in 2022, reflecting an operating margin of 6.8%, down from Q3 2022’s 8.8%.

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Adidas attributed the relative success in the quarter to the positive impact of the remaining Yeezy inventory sale, as well as the better than expected performance of its overall business.

Fashion industry onlookers applauded the brand’s decision to sell the remainder of its Yeezy merchandise and donate the proceeds to charity as a “sensible move” in May 2023.

In July 2023, Adidas announced a further release of Yeezy inventory, with a range of existing products being available in phases throughout the month of August across the world.

Following this, Adidas reported a flat second-quarter performance, with an industry expert suggesting the need to widen its offering to regain relevance following the loss of the Yeezy brand.

At that time, Adidas said it benefitted from the first sale of some of its Yeezy inventory, with the initial drop in June generating revenues around €400m in the second quarter of 2023.